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Johannesburg - The Congress of South African Trade Unions (Cosatu) has slammed telecoms company Telkom’s [JSE:TKG] plans to cut 300 jobs and outsource another 254 staff.

On Friday, Telkom confirmed that a Section 189 process - which deals with retrenchments - is expected to impact “approximately 300 people”.

The company further said it plans to “outsource in the region of 260 roles in its shared service environment through a parallel Section 197 (outsourcing) process”.

“Telkom has already proved that they are not dealing with stakeholders, especially unions in good faith, by proceeding with the announcement despite not properly engaging with stakeholders, including our affiliate Communication Workers Union (CWU),” said Cosatu in a Monday statement.

“We agree with CWU that this crude stunt by Telkom ... is a sneaky attempt to subvert the wage negotiations process,” said Cosatu.

Telkom, though, says it has engaged with unions on the matter and that it is “committed to transparent and open consultation”.

“To this end, Telkom met with organised labour last week, will meet with them again this week and will begin the CCMA (Commission for Conciliation, Mediation and Arbitration) facilitated consultation on 8 March,” Telkom’s managing executive for group communication, Jacqui O’Sullivan, told Fin24.

“Telkom is strictly adhering to the process, as required by organised labour, and the law,” O’Sullivan added.

‘Government must act’

In turn, Cosatu has called on government to step in and take action at the Johannesburg Stock Exchange (JSE) listed Telkom to prevent job shedding.

Government owns an approximate 40% stake of Telkom.

“This is a clear sign that partial privatisation does not improve the efficiency of SOE’s (state-owned enterprises) and will always result in massive job losses,” said Cosatu in its statement.

“Government cannot to continue to be indecisive, when the capital is heightening its offensive by shifting the burden of the economic crisis to the working class,” added the trade union grouping.

Cosatu further said that Telkom’s job cuts “makes a mockery of government’s commitment to create jobs” and that the company is “only focusing on generating profits at the expense of the workers”.

Telkom’s ‘turnaround’ strategy

In June last year, Telkom announced a ‘turnaround’ plan which involved cutting 4 400 jobs through voluntary severance packages or voluntary early retirement packages.

Another 3 400 employees would be transferred to outsourced companies, said Telkom at the time.

In November last year, Telkom made a provision of R1.5bn for voluntary severance and retirement packages affecting 3 108 staff.

And on Monday, Bloomberg reported that an internal Telkom strategy document has outlined how the company has identified 6 250 positions that will be cut from a total workforce of 13 895 by July this year.

However, Telkom’s O’Sullivan told Fin24 via email that the internal strategy document was shared as a first version with the company’s chief financial and chief executive officers on February 1 and that it has “changed quite a bit since then”.

O’Sullivan explained that Telkom is still considering options regarding outsourcing.

“No decision has been made and it is therefore premature to speculate on the possible outcome when analysis is still underway,” O’Sullivan said.